Study On World Bank Loan Project Preparatory Work

Utilizing the loan of international finance organizations is an important component of China's Opening and Reform Strategy, which is benefit to advance the socialism with Chinese characteristics by a sound and fast manner. In 1981, China received the first loan from the World Bank. And by the end of June 2007, the number of World Bank loaned projects is up to 284, and the signed loan amount totalizes USD 42.175 billion. The successful implementation of such loaned projects plays a great role in boosting the socio-economic development in China.Nowadays, China is in the primary stage of socialism. Its economic and political system is subject to reform and improvement, its investment and finance system is not complete enough and the project management, policy enforcement, system and procedure still need to be adjusted. As a global international finance organization, the World Bank also needs to process reform and adjustment to its systems and loan policy upon facing the economic globalization, finance globalization and the changeable political situation in the world. The implementation and management process of loaned projects is a process for both China and the World Bank to find out the problems and resolve the problems. Such problems always appear as restriction before being resolved. For example, the complicated procedure of project preparation is one of barriers for effective utilization of loan.Starting with the introduction of World Bank and its business in China, the Paper, with the preparation work of the Proposed Fourth Inland Waterways Project-Naji Navigation Complex financed by the World Bank as an example, illustrates in detail the complicated and time-consuming domestic and Bank's procedure & requirement, which covers the project identification, project preparation, project appraisal, loan negotiation and loan effectiveness. It points out the major problems existing in the preparation of current World Bank projects, such as:①the approval procedure is complicated and it is hard to link up the domestic procedure with the Bank's one;②the design of loan treaty in unreasonable, as the Bank has many additional conditions;③the project launches slowly. In conclusion, the Paper proposes some improvement strategies for Chinese government, the World Bank and the PMOs in various aspects; and indicates that all parties concerned shall strive to improve the existing management mode and method, enhance coordination and communication, simplify the project approval procedure, as well make proper loan treaty, strengthen the institutional capability and improve the personnel's quality, so as to expedite the project preparation and raise the efficiency of World Bank loan.